Indonesian Aero News

Ahmad said:
I think Indonesian Airforce want to practice the system first before being put into Jakarta region, so I suspect it is some where in Java.

Oya this is a new thing, maybe we should discuss about it further. Any one know this Indonesia Institute of Defense ?? Is it something being discussed before about trying to make an institution like ADD Korea ? As we know there is plan to obligate Defense Ministry to set aside 5 % of their budget for R&D program and because of that we need to make a new institution to manage it.

https://twitter.com/x/status/1339171811783712768
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I cant find any information about it. So its unclear for me when they want to open the institute, and where they will put the campus. The question also is where do they want to get their lecturers from, ITB or from several universities, or professionals from civil companies or armed forces?
 
Sandhi Yudha said:
I cant find any information about it. So its unclear for me when they want to open the institute, and where they will put the campus. The question also is where do they want to get their lecturers from, ITB or from several universities, or professionals from civil companies or armed forces?
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I dont think it is about education like making a campus since we have already ITB, UI, ITS with also have some research program on defense. I have tried to googling the name but I cant find any information related to it. I think it is like collaborative research work that will unite and bridge between engineers in our state owned company, researcher in our universities, and also engineers/researcher from our research agency.
 
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Indo Defence 2021 in April? November is the better option. In April the availability of vaccines globally will not be widespread. I expect a lot of vendors will be forced to decline the invitation.

Oh, in theory with good enough social distancing and mask use and self-quarantine one can do business without having been vaccinated. But a look at Indonesia's lack of success in containing the pandemy will make people think that going to Indonesia without vaccination for an exhibit that's normally attended by thousands is a very risky proposition.

I am guessing that come February Napindo (the event organizer) will announce another postponement, probably to July or August. July or August might work. November would be better, though.
 
republika.co.id

KPK Periksa Anak Mantan Wapres Terkait Korupsi PT DI |Republika Online

Dia diperiksa dalam kapasitasnya sebagai saksi untuk melengkapi berkas perkara BS.
republika.co.id republika.co.id

This is what can be one of biggest obstacle on developing Indonesian Strategic SOE. Corruption and Miss Management. Granted after 1998, the subsequent administrations in Indonesia are not really big on Investing with DI as in time of Soeharto Investment with IPTN. However the problem with DI incompetence management also a big factor of reluctance in some of Government Technocrats especially from Finance and National planning to invest in big time on aerospace sectors. Simply they did not trust DI can manage it properly.

Some years ago during my time in one of SOE Banks, I got chances talking with some people from Ministry of Finance and Bapenas during discussion session on how Banking can help Indonesian Strategic Industries. The talk more on Pindad and various Shipyards. However when I ask them on DI, they're bitterly laughed and says; Even us still not comfortable putting money there, thus how we're going to sell the idea on financing them to the Banks ?

There's even idea also some years ago to sold DI to strategic investors as majority. The input from potential Investors that being approach were not positive. They're practically saying that it will be too costly, as they practically have to lay off everyone and restart from scratch.

Thus the way Indonesian Government begin restarting DI with N219 is not simply due to lower Investment (compare to Investment during IPTN era), but also to test how DI going to manage the projects. Even then Government ask LAPAN to also get involved with the project, with one of the reason was to reduce everything done in one basket.

No wonder even some in MinDef always see DI on cynical point of view. A lot off Indonesian SOE not only need new Investment, but also need total management revamp and total culture rebuild. Some of them like in few SOE Banks and Telco already shown progress. Which's why some of their executives being rotate to other SOE's to do total rebuild on those SOE's. All this shown that to regain ambitions in Aerospace sector still need long protracted road ahead.
 
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"Perbuatan para tersangka mengakibatkan terjadinya kerugian keuangan negara pada PT DI sekitar Rp 202,1 miliar ditambah kurang lebih 8,6 juta dolar Amerika Serikat (AS). Sehingga total kerugian negara berkisar Rp 315 miliar dengan asumsi kurs 1 dolar AS adalah Rp 14.600."

Maybe this is not one of biggest cases, but Rp315.000.000.000 is still a lot, i hope the people responsible for this end up behind bars for years, and not being protected by politicians.
 
Dont just blame DI.

DI has been under a good leader now and under Elfin has made a profit last year. He is a transformer in PT PELNI, another SOE who always produced loss before the transformation which was lead by him. This corruption chase can be the entry point of erasing all the corrupt dudes on the company. So I would say this KPK finding give more optimism on the future of DI.

Here even previous Air Force Chief has also been under KPK questioning under the same DI corruption case. As I said Air Force acquisition planning may also be related to corruption intention. Not to mention previous Chief with that helicopter chase.

Generally whole nation is getting transformed now after we have our democracy and set up KPK. I know many private owned companies also have similar sickness and try to win any tender by bribing.

https://surabaya.tribunnews.com/202...ang-diperiksa-kpk-sebagai-saksi-punya-barang-
 
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Sandhi Yudha said:
Maybe this is not one of biggest cases, but Rp315.000.000.000
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The questions is not just this case, however more to if DI it self are ready to become commercial player or just another 'institution' suckling to government hand out for survival. One of the test is to have good Proven management that can regain market trust. This has to be shown on their efficiency and market support capabilities.

Ahmad said:
has been under a good leader now and under Elfin has made a profit last year.
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Profit ? It's not commercial profit, it's more profit due to government hand out on projects and injection that cover losses.

Some Banks and Financial Institution are already willing to finance Indonesian Shipyards for government projects like from MinDef, as example. However no financial institutions even domestic ones willing to finance working capital yet to DI. Government need to provide guarantee to Banks even local one, for them to give Bank Guarantee for project. Let alone working capital financing.

The new CEO has credentials but he still has a long way to reform DI. DI still has IPTN culture that relied on Government projects and injections to make it work able. Government injections during Soeharto era has make DI/IPTM Bloated Inefficient institution. However unlike some other SOE that already try since 1998 to work out in Commercial market, DI still hoping and waiting for Government projects.

It's simple, if DI already an healthy commercial company, then Banks and Financial Institutions willing to finance them, based on their performance only. Not based on Government guarantee, as currently happening.

Thus it's understandable that even Government still do not want to Invest much with DI. The risk DI can become another HAL is there. Look at HAL, no matter how much Indian Government already pouring capital injection and Projects to them, still their projects mostly way over date line and over budget.

Pouring Investment in DI has to be done gradually and based on their capabilities to market their products commercially and gaining market confidence. Indonesia can't afford to repeat mistakes of pouring Investment like during IPTN time again.

They have to prove their ability to build N219 on efficient way, and gaining market confidence with N219, before begin with another Products. That's why current administration only thinking just add MALE UAV for DI during this term. Everything has to be done step by step again.

That's why I chuckled if reading local forums or media that 'demand' the government to Invest more on DI for larger plane projects. How Government want to Invest more, if they are not proven yet can produce and sell N219 commercially in the market?

Remember, people buy CN-235 and NC-212i not because of DI. They continue procurement on those types due to Airbus behind it. They trust Airbus and not DI. For N-219, DI has to make the market trust them on their own. This's still a test that DI has not proven yet.
 
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A part of Indonesian Aerospace's problem is the dual demand placed on it by the state. That is, it must serve the military and it must turn a profit. But wait, those two demands don't necessarily contradict each other! Well... except TNI's orders are too small and too short term to sustain a robust aerospace industry. And I am not seeing an easy way out of this. Let's take a look at the options for Indonesian Aerospace here.

It can try to focus on being profitable. To become profitable there are two common ways. One is to charge a premium price in order to make up for the very low production rate. This isn't possible because TNI refuses to pay such a premium and Indonesian Aerospace, being a government controlled corporation, can be ordered to sell something to TNI at cost (or even at a loss if they so wish). Okay, so how about going with volume and try to sell a lot of things and get the benefit of economy of scale. That's the other way. But to do so one can not depend on TNI. They are notoriously stingy and buy in very small lots. Foreign militaries may make up for this though and they do have some success selling CN-235 and NC-212s to foreign militaries. But overall this seems to be niche too. The orders are always in small lots and are too irregular.

So if Indonesian Aerospace wants to ensure profitability they must focus on the civilian market instead of the military. Because the civilian market is where the money is. This is what they are trying to do with the N-219. Notice that the main interest in this aircraft comes from the civilian airlines and institutions and provincial governments while TNI's interest is maybe 18 units total so far. Hopefully this will increase but let's be honest, TNI is lukewarm on N-219. It's too basic and they'd rather get the proven C-212 series. This makes sense from their POV, but it illustrates my point that if Indonesian Aerospace wants to be consistently profitable it can't rely on TNI at all.

Alternatively, Indonesian Aerospace can focus on serving TNI to their best, but in that case we can not demand them to be profitable. TNI just don't have the volume. In the future TNI will change from a land-oriented garrison army into a sea-air oriented mobile force. In such an environment maybe Indonesian military market will be sufficient for Indonesian Aerospace to be profitable. But we aren't there yet and won't be for a while. And I don't mean in 5-6 years. I mean 2-3 decades. And given our history of two steps forward one step back, I won't be surprised if it ends up taking 4 decades.

So Indonesian Aerospace today is in a difficult position driven by two demands that are contradictory in practice. It tries to do both by splitting its effort and grow the civilian side in the hope of using the profit from the civilian market to help offset the losses from the military side.
 
I remembered in early 90's, Habibie come to my Allmamater to give lecture on IPTN and overall Strategic Industries. His emphasis when give lecture in my Allmamater was different then what he gave during his lecture in his own Allmamater in Bandung. In Bandung he emphasis more on Technology achievement, while in Salemba he's emphasize more on how making the strategic Industry as viable commercial company.

Perhaps because the Technocrats from my Allmamater was already very concerned on how long the Government need to keep pumping money to the strategic Industry including his crown jewel IPTN. At the same time they're still not see a way out from those companies to be commercially viable on their own.

So from beginning IPTN or now DI already been design for both strategic needs (thus Military needs), but in the same time has to be commercially viable. For that Habibie choose dual function aircraft that can be used in both Military and Commercial needs. His partnership with MBB for BO-105, Aerospatiale Super Puma, and Casa for C-212 and CN-235 were actually considered good move by the Financials and Economics technocrats.

However he then manage convince Soeharto for big Investment on N-250, when IPTN was not settle yet. He should create enough market volume first and gain good market reputation, to make IPTN commercially viable. That's what Embrear do. Embrear toward their own history try to create step by step move and not jump before ready.

Jumping to larger projects without you're ready, is the formula that create messed with HAL in India. HAL should be competing with Embrear now, as Technology wise they are capable. However unfocus order from various Indian Administration create HAL that in the end become institution that relied on Indian Military and Government projects, and not their own initiatives to become commercially viable aerospace company like Embrear.

Embrear also done Brazilian Military orders. They're also doing some Brazilian government initiative projects. However at the same time they are also trying and so far quite successful on gaining commercial market chunk. They keep looking to become commercially viable aerospace company first, while still keep doing Brazil strategic needs. Same thing like in Indonesia, Brazilian Military orders will not going be enough to make Embrear survive as commercial company. Same thing like Indonesia, Brazilian government also can't afford to keep pumping money to Embrear. That's why they float Embrear to the capital market, but after Embrear can shown market they're viable commercial Aerospace company.

Indonesia can't afford be like China that keep pumping money to AVIC or other various Aerospace company there. Indonesia also can't follow India's move with HAL. In fact with India now opening their aerospace Industry to private sector shown that some bureaucracy in India already see their strategy with HAL in the end will not be sustainable.

There's no excuse that because has to cater Military and Strategic needs, DI have difficulty to become viable commercial company. Embrear already shown as example that can be done both. What you need is good management, good strategy from your government, and in the end (and most importantly) try to become realistic and done step by step within your capabilities. Don't repeat jumping strategy being done by IPTN during Habibie's tenure.

Like I said several times, Habibie is brilliant engineer, however he's record as commercial CEO is not good (and I try to say it in polite way). He's Investing in N-250, with fly by wire system, something that Turboprop market didn't want that in that time. Making N-250 by many Aerospace analysts that time see become too costly to build, relative to what market willing to pay. Before N-250 ready, he jump to N-2130, which is as concept are good (we see it on Airbus 220, Embrear E Jets or Sukhoi Superjet). The problem he's doing it with an aerospace company that still only able to crawl, and still learning to walk.

In the end if Indonesia wants DI to become sustainable in Aerospace Industry, then it has to relearn everything on step by step again. N219 is good steep, but need to refrain DI for further Investment for N245 (for example) before they can achieve sustainable Production run and proven market acceptance for N219. They need to make N219 as cash cow first, before moving to next step on larger Turboprop. It's not the matter of Technology capabilities, but it's matter on commercial survivability.

If government and TNI wants DI to do Defense projects, then it has to come from outside DI budget and not be calculated to DI Investment. That's why Embrear separate their Military business from their commercial ones.
 
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While overall I agree with Ananda, I disagree with him comparing Embraer with Indonesian Aerospace.
@Ananda
Edit.:Accidentally hit enter before I even started typing. Will continue in next post.
 
Indonesian Aerospace will find it very difficult to learn from Embraer because their circumstances are very different. Embraer can count on support from the Brazilian Air Force. Indonesian Aerospace can't.

Embraer's very first aircraft was the twelve seater EMB-110 passenger aircraft. They picked that class of aircraft because it's usable by both the military and civilian market. In than sense the N-219 is similar. Sure it's slightly larger, but it's about the same niche.

But the Brazilian Air Force (FAB) put an order of eighty(!) EMB-110 very early. The prototype flew in 1968. Order was placed in 1969. Certificate of Airworthiness obtained in 1972. First delivery in 1973. This implies a very high degree of trust between Embraer and FAB. Contrast that with TNI-AU. How many order has TNI-AU placed for N-219? Zero. It's the army and the navy who are interested in the N-219. And it's not even an actual purchase, but merely an expression of interest for a total of 18 aircraft.

Embraer also license-produced aircraft, but their licensed production of the Aermacchi MB-326 wasn't in batches of threes and fours. No, from the very beginning FAB ordered 166 MB-326, of which 130 were built by Embraer.

We can see more evidence of FAB's support with the original Tucano, the EMB-312. In 1980 FAB ordered 118 Tucano. Later on they added a total of fifty more Tucano. We can see a similar level of commitment with the EMB-314 Super Tucano. The initial order was for 78 units, later expanded to 99 units.

This volume of purchases gave Embraer stability. It also let them plan ahead. Embraer in the seventies and eighties know what their order book looked like for the next six to seven years. They know what they will build and how many and when to deliver because the orders were there from the very beginning. They can upgrade their equipment and expand their facility without having to worry that the upgrade/expansion will end up unused and wasted because the orders were there from the beginning. This let them establish their manufacturing base, improve their employees' skill sets, acquire/invent newer technologies, etc.

In contrast, Indonesian Aerospace can't count on any order from TNI. We already established that TNI is lukewarm at best for the N-219 at the moment. But how about NC-212i? That's proven and certified. Well, TNI ordered 9. How does that even compare with the 80 EMB-110 that FAB ordered?

Embraer managed to move away from reliance on domestic military order, but arguably this was because FAB's volume of order is sufficiently large to establish an industrial base from which they can go into the civilian market. This condition doesn't exist for Indonesian Aerospace. They will try anyways because they have to, but their position is not like Embraer's of the '70s and '80s.
 
I put Embrear and HAL for comparison on what DI future can be. Both Embrear and HAL start as both Brazil and Indian government effort to enter Aerospace Industry. The difference as you can check in their history, Embrear move step by step on developing toward what commercial market wants, while in same time still catering the need of Brazilian Military. Remember commercial viable means not only producing commercial plane, but also Military business.

While India from beginning push HAL on strategic projects, and spend so much Investment on Tejas, however compared to Embrear, HAL as aerospace company has to continue relied with Indian Military order, as they don't have Products to commercial market on their own.

So both got good support from Brazilian and Indian government and Military projects. However the results are different. One already become viable commercial players, while the other continue relied on Government projects and injections.

IPTN in beginning got reasonable support for projects from Indonesian Government and Military. CN-235 asside from TNI, also being build for Merpati for example. Yes, the number is not as big Embrear got for EMB-110, however in beginning it's sufficient enough. However then IPTN spend so much resources and capital to build N-250 when they're not financially stable yet.

In the end of 90's after Economic crisis 1998, I got opportunity to follow IMF and World Bank assessment on IPTN condition. It's clear if the Investment for N-250 being used instead to strengthen IPTN facilities and marketing effort for existing Products like CN-235, and C-212 and also not "bloating" their organization and work force prematurely. Even after Economic Crisis IPTN still have reasonable cash reserve to stay afloat. However that premature move resulted, even with Habibie as President, he can't avoid reality to cut down IPTN organization and work force significantly.

So IPTN just like Embrear got sufficient support from the government. Why has to be only from Military ? EMB-110 just like C-212 and CN-235 are dual capabilities airplanes. Just like N-219 is going to. Government support not only needed from the Military, but can be from other government organizations. If the initial order (including from provincial government, TNI, and Airlines) that being put in media turn to be fixed order even only 66%, then it's enough to make DI to turn the line as commercial standard.

My point is more that DI and Government has to do it step by step. Don't let DI entering larger Turboprop program as plan, until they can turn N219 project as commercially viable first.

Now DI is not having same level of support of IPTN got in 80's and 90's. That's what I say N219 is the test they have to perform, to regain the trust from the Technocrats, and more importantly the market.

EMB-110 eventough being ordered in large number by Brazilian Military, however it's actually use for many Brazilian government non Military program. Thus it doesn't matter whether the government support come from Military, Civilian agency or regional Airlines (those regional Airlines order also come from Government lobby). The most important is for DI to do it on commercial standard practice, gain market recognition. Other way around can have the risk to continue depend on Government projects like HAL.

HAL technology wise is not below Embrear, perhaps in some area they are ahead of Embrear. However can HAL survive without Indian Government projects and injections ?
So it's up to DI management and Indonesian government either to turn DI toward HAL path or Embrear path.
 
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What matter is indeed sufficient support from the government.
Like the gentlemen above already told, a continues and well planned flow of orders is important. Because of that procurement of foreign aircrafts from similar types/same class shouldn't be done. For example for some reason the government ordered a handful of PZL M28 twin turboprops and some Mi-2 copies from Poland for the police.
I read somewhere that there was once a plan to let IPTN produce some PZL-parts, but as we know that never happen and the police has some weird stuff now in their fleet.

The N219 was for many years not highly regarded by the Jokowi government, not really useful for PDI-P promotion.

Only later they give more attention to this project.
Remarkable enough the N219 and Elang Hitam UAV projects seems to get more priority now.
The Elang Hitam UAV (non-flyable model, right?) was unveiled to the public on 30 December 2019 at IPTN's facilities in Bandung. At that time the first flight was expected to take place at the end of 2020. I wonder if there is any development/progress after the roll-out last year.
 
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Sandhi Yudha said:
What matter is indeed sufficient support from the government.
Like the gentlemen above already told, a continues and well planned flow of orders is important. Because of that procurement of foreign aircrafts from similar types/same class shouldn't be done. For example for some reason the government ordered a handful of PZL M28 twin turboprops and some Mi-2 copies from Poland for the police.
I read somewhere that there was once a plan to let IPTN produce some PZL-parts, but as we know that never happen and the police has some weird stuff now in their fleet.

The N219 was for many years not highly regarded by the Jokowi government, not really useful for PDI-P promotion.

Only later they give more attention to this project.
Remarkable enough the N219 and Elang Hitam UAV projects seems to get more priority now.
The Elang Hitam UAV (non-flyable model, right?) was unveiled to the public on 30 December 2019 at IPTN's facilities in Bandung. At that time the first flight was expected to take place at the end of 2020. I wonder if there is any development/progress after the roll-out last year.
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Apache next acquisition plan by Army should be directed to Elang Hitam MALE UCAV acquisition if the program is successful to complete the development and can secure the missile from Turkey. The reason N 219 and Elang Hitam UAV are prioritized is because the cost is not that expensive compared to N 245 or KFX/IFX program. Jokowi is sensitive when the program reach 1 trillion Rupiah ceiling.
 
Ahmad said:
Apache next acquisition plan by Army should be directed to Elang Hitam MALE UCAV acquisition if the program is successful to complete the development and can secure the missile from Turkey. The reason N 219 and Elang Hitam UAV are prioritized is because the cost is not that expensive compared to N 245 or KFX/IFX program. Jokowi is sensitive when the program reach 1 trillion Rupiah ceiling.
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By Apache, do you mean the AH-64E Apache?
 
Sandhi Yudha said:
continues and well planned flow of orders is important. Because of that procurement of foreign aircrafts from similar types/same class shouldn't be done.
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I think so far for domestic procurement for CN-235 class or NC-212i class, DI got preference for government Contracts. However seems not in rotary wings. I don't think asside some parts for H225M, DI did not involved on any other rotary wings ecosystem anymore. I might be wrong, even with Bell, I'm not so sure if DI still involved with parts manufacturing. I'm quite sure they're not doing assembly line on 412 anymore. Just doing finishing installation projects for TNI 412 order. For that, I'm so sure that DI rotary wings partnership with Airbus and Bell, provide smaller margin compared to Fixed wing Contracts like CN-235 and NC-212i.

PT. Dirgantara Indonesia (Persero)

www.indonesian-aerospace.com www.indonesian-aerospace.com

Now, DI claim they already got 120 orders for N219. Thus if 66% of that orders translate to firm order as example, it will be enough for DI to turn N219 line as stable business. Add with existing CN-235 and NC-212i, it should be enough to build DI for stable business at least for this decade. As long as they're not being push for new Investment.

As for MALE UAV project, it's going to be used by TNI mostly. Don't try to think on getting export orders. Getting few export already good enough. For that Financing and running the project has to be from Government injection, and not DI cash flow. Thus will not burden DI financially. If government push it on DI's book, it will create another inefficient business line for DI.

With CN-235, NC-212i and N219, as long as manage carefully, DI can have chances to maintain sustainable business lines. CN-235 line also provide order from Airbus, considering some parts for C-295 come from DI.
However, those other Military projects should not be burdening DI working capital, by has to be finance it separately from DI's Book.

There's no way countries like Indonesia can provide sustainable Military projects yet. Even India and Brazil still can't. That's why HAL and Embrear Military division always got injections from Government.
However if DI can shown to the market on N219 reliability (I'm omitting CN-235 and NC-212i as most Customers basically still looking to Airbus support and not DI), and gain trust from market as reliable commuter regional turboprop producers, then DI can have their own Products that not need depends on Government Projects.

That's a start to become commercially viable company. That's why this N219 is real test on DI's path.
 
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